We are almost done with the explanation of 15 U.S.C. 1681a - the definition section of the Fair Credit Reporting Act. The next subsection I will explain is subsection (u) which defines the term "reseller".
"(u) The term 'reseller' means a consumer reporting agency that - -
(1) assembles and merges information contained in the database of another consumer reporting agency or multiple consumer reporting agencies concerning any consumer for purposes of furnishing such information to any third party, to the extent of such activities; and
(2) does not maintain a database of the assembled or merged information from which new consumer reports are produced."
[In other words, this means a company that buys the credit information from a consumer reporting agency and then resells it to a third party. You see this a lot with mortgage companies that buy "3 in 1" reports from resellers that take the information from all three national credit bureaus and combine them into one credit report that is easier for the loan officer at the mortgage company to use. Subsection (2) makes it clear that a consumer reporting agency could never be a reseller and vice versa.]
"(v) The term 'Commission' means the Federal Trade Commission."
[The Federal Trade Commission oversees the government's enforcement of the Fair Credit Reporting Act so anywhere you see the word "Commission" in the FCRA, its referring to the Federal Trade Commission.]
"(w) The term 'nationwide specialty consumer reporting agency' means a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis relating to - -
(1) medical records or payments;
(2) residential or tenant history;
(3) check writing history;
(4) employment history; or
(5) insurance claims."
[This definition refers to many of the non-traditional consumer reporting agencies, such as those that deal exclusively with medical histories, tenant histories (used by landlords), check writing CRAs such as Telecheck, employment histories used by prospective employers, or companies that maintain records of your insurance claim history.]
"(x) Exclusion of Certain Communications for Employee Investigations
(1) A communication is described in this subsection if --
(A) but for subsection (d)(2)(D), the communication would be a consumer report;
(B) the communication is made to an employer in connection with an investigation of - -
(i) suspected misconduct relating to employment; or
(ii) compliance with Federal, State, or local laws and regulations, the rules of a self-regulatory organization, or any preexisting written policies of the employer;
(C) the communication is not made for the purpose of investigating a consumer's credit worthiness, credit standing, or credit capacity; and
(D) the communication is not provided to any person except - -
(i) to the employer or an agent of the employer;
(ii) to any Federal or State officer, agency, or department, or any officer, agency, or department of a unit of general local government;
(iii) to any self-regulatory organization with regulatory authority over the activities of the employer or employee;
(iv) as otherwise required by law; or
(v) pursuant to section 608."
[In other words, communications that are for investigations of suspected misconduct of employees or regarding compliance with a law, that also does not include the investigation of a consumer's credit history and is not just given out to a third party unless its the employer, a regulatory authority or a Federal or State officer, then its not a consumer report and is not covered by the Fair Credit Reporting Act.]
"(2) Subsequent disclosure. After taking any adverse action based in whole or in part on a communication described in paragraph (1), the employer shall disclose to the consumer a summary containing the nature and substance of the communication upon which the adverse action is based, except that the sources of information acquired solely for use in preparing what would be but for subsection (d)(2)(D) an investigative consumer report need not be disclosed."
[In other words, if a communication that is described in paragraph one is made and an adverse action (i.e. firing, demotion, decision not to hire), the employer must provide a summary of the communication to the consumer, much like a credit grantor must disclose such a summary after an adverse credit action (i.e. denial of credit application).]
"(3) For purposes of this subsection, the term 'self-regulatory organization' includes any self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934), any entity established under title I of the Sarbanes-Oxley Act of 2002, any board of trade designated by the Commodity Futures Trading Commission, and any futures association registered with such Commission."
This concludes (finally) my explanation of the definition section of the FCRA. Next is 15 U.S.C. 1681b which deals with the permissible reasons why someone can access your credit report.
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Showing posts with label 1681a. Show all posts
Showing posts with label 1681a. Show all posts
May 30, 2009
15 U.S.C. 1681a - Part 9
I continue my explanation of 15 U.S.C. 1681a with subsection (r).
"(r) Credit and Debit Related Terms
(1) The term 'credit issuer' means - -
(A) a credit card issuer, in the case of a credit card; and"
[i.e. Bank of America, Chase, etc.]
"(B) a debit card issuer, in the case of a debit card."
[i.e. your bank or whoever issues your bank card]
"(2) The term 'credit card' has the same meaning as in section 103 of the Truth in Lending Act."
[I think everyone in the nation knows what a credit card is, unfortunately.]
"(3) The term 'debit card' means any card issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account of the consumer at such financial institution, for the purpose of transferring money between accounts or obtaining money, property, labor, or services."
[You probably know what a debit card is too. Its your ATM card that also allows you to make purchases just like a credit card, except that the money comes directly out of your bank account to pay the seller. Think of it this way, a debit card is like gambling in Vegas with your money. You can get into trouble but you can't lose more than you have. A credit card is like gambling in Vegas on a line of credit from the casino, which means you can lose more than you have and get in big trouble. With a credit card, you can spend more than you have. With a debit card, you can't.]
"(4) The terms 'account' and 'electronic fund transfer' have the same meanings as in section 903 of the Electronic Funds Transfer Act."
[The Electronic Funds Transfer Act (i.e. EFTA) defines "account" as "a demand deposit, savings deposit, or other asset account". So its a bank or other financial instution account that holds your money, but does not include a credit card or other credit type account (i.e. line of credit). An "electronic fund transfer" according to the EFTA is a debit or credit to an account that is initiated electronically.]
"(5) The terms 'credit' and 'creditor' have the same meaings as in section 702 of the Equal Credit Opportunity Act."
[The Equal Credit Opportunity Act defines "credit" as " the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor". In other words, the right to charge it but not have to pay for it until later.
The term "creditor" according to the ECOA means "any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit." In other words, any lender such as a credit card company, a bank, a mortgage company, etc.]
"(s) The term 'Federal banking agency' has the same meaning as in section 3 of the Federal Depost Insurance Act."
[The Federal Insurance Act defines "Federal banking agency" as "the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Board of Governors of the Federal Reserve System, or the Federal Deposit Insurance Corporation."]
"(t) The term 'financial institution' means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person that, directly or indirectly, holds a transaction account (as defined in section 19(b) of the Federal Reserve Act) belonging to a consumer."
["Financial institution" pretty much means any bank, credit union, savings and loan (do those still exist?), or anyone that holds a transaction account of a consumer.]
Ok, that's it for part 9. Part 10 of the explanation of 15 U.S.C. 1681a will start with subsection (u)'s definition of "reseller".
"(r) Credit and Debit Related Terms
(1) The term 'credit issuer' means - -
(A) a credit card issuer, in the case of a credit card; and"
[i.e. Bank of America, Chase, etc.]
"(B) a debit card issuer, in the case of a debit card."
[i.e. your bank or whoever issues your bank card]
"(2) The term 'credit card' has the same meaning as in section 103 of the Truth in Lending Act."
[I think everyone in the nation knows what a credit card is, unfortunately.]
"(3) The term 'debit card' means any card issued by a financial institution to a consumer for use in initiating an electronic fund transfer from the account of the consumer at such financial institution, for the purpose of transferring money between accounts or obtaining money, property, labor, or services."
[You probably know what a debit card is too. Its your ATM card that also allows you to make purchases just like a credit card, except that the money comes directly out of your bank account to pay the seller. Think of it this way, a debit card is like gambling in Vegas with your money. You can get into trouble but you can't lose more than you have. A credit card is like gambling in Vegas on a line of credit from the casino, which means you can lose more than you have and get in big trouble. With a credit card, you can spend more than you have. With a debit card, you can't.]
"(4) The terms 'account' and 'electronic fund transfer' have the same meanings as in section 903 of the Electronic Funds Transfer Act."
[The Electronic Funds Transfer Act (i.e. EFTA) defines "account" as "a demand deposit, savings deposit, or other asset account". So its a bank or other financial instution account that holds your money, but does not include a credit card or other credit type account (i.e. line of credit). An "electronic fund transfer" according to the EFTA is a debit or credit to an account that is initiated electronically.]
"(5) The terms 'credit' and 'creditor' have the same meaings as in section 702 of the Equal Credit Opportunity Act."
[The Equal Credit Opportunity Act defines "credit" as " the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor". In other words, the right to charge it but not have to pay for it until later.
The term "creditor" according to the ECOA means "any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit." In other words, any lender such as a credit card company, a bank, a mortgage company, etc.]
"(s) The term 'Federal banking agency' has the same meaning as in section 3 of the Federal Depost Insurance Act."
[The Federal Insurance Act defines "Federal banking agency" as "the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Board of Governors of the Federal Reserve System, or the Federal Deposit Insurance Corporation."]
"(t) The term 'financial institution' means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person that, directly or indirectly, holds a transaction account (as defined in section 19(b) of the Federal Reserve Act) belonging to a consumer."
["Financial institution" pretty much means any bank, credit union, savings and loan (do those still exist?), or anyone that holds a transaction account of a consumer.]
Ok, that's it for part 9. Part 10 of the explanation of 15 U.S.C. 1681a will start with subsection (u)'s definition of "reseller".
May 27, 2009
15 U.S.C. 1681a - part 8
Here we go with part 8 of my explanation of 15 U.S.C. 1681a - the definition section of the Fair Credit Reporting Act. The next definition is subsection (p) "consumer reporting agency that compiles and maintains files on consumers on a nationwide basis".
"(p) The term 'consumer reporting agency that compiles and maintains files on consumers on a nationwide basis' means a consumer reporting agency that regularly engages in the practice of assembling or evaluating, and maintaining, for the purpose of furnishing consumer reports to third parties bearing on a consumer's credit worthiness, credit standing, or credit capacity, each of the following regarding consumers residing nationwide:
(1) Public record information.
(2) Credit account information from persons who furnish that information regularly and in the ordinary course of business."
[When thinking about consumer reporting agencies, most people only think of the big three - i.e. Experian, Equifax and Trans Union. But there are many consumer reporting agencies. There used to be hundreds until the big three started buying them up and absorbing them into themselves. Now, there are still many smaller consumer reporting agencies, but most of these do not maintain their own consumer files but instead access the big three's files and prepare 3 in 1 consumer reports for mortgage lenders, automobile finance companies, etc. One exception is CSC, which is a consumer reporting agency that "owns" the credit files compiled by Equifax regarding consumers from approximately 15 states. The credit files of these consumers reside on Equifax's computer but are "owned" and "maintained" by CSC.
The only consumer reporting agencies that fall under the definition of subsection (p) are the big three and certain non-traditional consumer reporting agencies such as Telecheck, which compiles information regarding consumers' check writing histories.]
"(q) Definitions relating to fraud alerts.
(1) The term 'active duty military consumer' means a consumer in military services who --
(A) is on active duty (as definied in section 101(d)(1) of title 10, United States Code) or is a reservist performing duty under a call or order to active duty under a provision of law referred to in section 101(a)(13) of title 10, United States Code; and
(B) is assigned to service away from the usual duty station of the consumer."
[This definition includes any active military serviceman stations away from his or her home and any reservist called up and assigned away from his or her home.]
"(3) The term 'identity theft' means a fraud committed using the identifying information of another person, subject to such further definition as the Commission may prescribe, by regulation."
[i.e. when an identity thief uses any item of the personal information (i.e. name, Social Security number, date of birth, etc.) of a consumer to commit a fraud such as opening a fraudulent credit account.]
"(4) The term 'identity theft report' has the meaning given that term by rule of the Commission, and means, at a minimum, a report - -
(A) that alleges an identity theft;
(B) that is a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency, including the United States Postal Inspection Service, or such other government agency deemed appropriate by the Commission; and
(C) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false."
[This definition includes police reports that allege identity theft but also includes reports to Federal agencies such as the Secret Service, the FBI and the United States Postal Inspector. I have found in my practice representing victims of identity theft that, many times, police departments refuse to take police reports regarding identity theft. Most of the time, consumers do not realize that they can go to the post office and also make an identity theft report that has the same force and effect as a police report.]
"(5) The term 'new credit plan' means a new account under an open end credit plan (as defined in section 103(i) of the Truth in Lending Act) or a new credit transaction not under an open end credit plan."
[Sounds to me like this means any new account or credit transaction.]
In part 9, I will move on to subsection (r) of 15 U.S.C. 1681a which defines "credit and debit related terms".
"(p) The term 'consumer reporting agency that compiles and maintains files on consumers on a nationwide basis' means a consumer reporting agency that regularly engages in the practice of assembling or evaluating, and maintaining, for the purpose of furnishing consumer reports to third parties bearing on a consumer's credit worthiness, credit standing, or credit capacity, each of the following regarding consumers residing nationwide:
(1) Public record information.
(2) Credit account information from persons who furnish that information regularly and in the ordinary course of business."
[When thinking about consumer reporting agencies, most people only think of the big three - i.e. Experian, Equifax and Trans Union. But there are many consumer reporting agencies. There used to be hundreds until the big three started buying them up and absorbing them into themselves. Now, there are still many smaller consumer reporting agencies, but most of these do not maintain their own consumer files but instead access the big three's files and prepare 3 in 1 consumer reports for mortgage lenders, automobile finance companies, etc. One exception is CSC, which is a consumer reporting agency that "owns" the credit files compiled by Equifax regarding consumers from approximately 15 states. The credit files of these consumers reside on Equifax's computer but are "owned" and "maintained" by CSC.
The only consumer reporting agencies that fall under the definition of subsection (p) are the big three and certain non-traditional consumer reporting agencies such as Telecheck, which compiles information regarding consumers' check writing histories.]
"(q) Definitions relating to fraud alerts.
(1) The term 'active duty military consumer' means a consumer in military services who --
(A) is on active duty (as definied in section 101(d)(1) of title 10, United States Code) or is a reservist performing duty under a call or order to active duty under a provision of law referred to in section 101(a)(13) of title 10, United States Code; and
(B) is assigned to service away from the usual duty station of the consumer."
[This definition includes any active military serviceman stations away from his or her home and any reservist called up and assigned away from his or her home.]
"(3) The term 'identity theft' means a fraud committed using the identifying information of another person, subject to such further definition as the Commission may prescribe, by regulation."
[i.e. when an identity thief uses any item of the personal information (i.e. name, Social Security number, date of birth, etc.) of a consumer to commit a fraud such as opening a fraudulent credit account.]
"(4) The term 'identity theft report' has the meaning given that term by rule of the Commission, and means, at a minimum, a report - -
(A) that alleges an identity theft;
(B) that is a copy of an official, valid report filed by a consumer with an appropriate Federal, State, or local law enforcement agency, including the United States Postal Inspection Service, or such other government agency deemed appropriate by the Commission; and
(C) the filing of which subjects the person filing the report to criminal penalties relating to the filing of false information if, in fact, the information in the report is false."
[This definition includes police reports that allege identity theft but also includes reports to Federal agencies such as the Secret Service, the FBI and the United States Postal Inspector. I have found in my practice representing victims of identity theft that, many times, police departments refuse to take police reports regarding identity theft. Most of the time, consumers do not realize that they can go to the post office and also make an identity theft report that has the same force and effect as a police report.]
"(5) The term 'new credit plan' means a new account under an open end credit plan (as defined in section 103(i) of the Truth in Lending Act) or a new credit transaction not under an open end credit plan."
[Sounds to me like this means any new account or credit transaction.]
In part 9, I will move on to subsection (r) of 15 U.S.C. 1681a which defines "credit and debit related terms".
15 U.S.C. 1681a - part 7
This post explains 15 U.S.C. 1681a(o) of the Fair Credit Reporting Act, which reads:
"(o) Excluded communications. A communication is described in this subsection if it is a communication"
[A communication must meet all of the following criteria (i.e. 1 through 5) to be considered "excluded"]
"(1) that, but for subsection (d)(2)(D), would be an investigative consumer report;
(2) that is made to a prospective employer for the purpose of
(A) procuring an employee for the employer; or
(B) procuring an opportunity for a natural person to work for the employer;
(3) that is made by a person who regularly performs such procurement;
(4) that is not used by any person for any purpose other than a purpose described in subparagraph (A) or (B) of paragraph (2); and
(5) with respect to which
(A) the consumer who is the subject of the communication
(i) consents orally or in writing to the nature and scope of the communication, before the collection of any information for the purpose of making the communication;
(ii) consents orally or in writing to the making of the communication to a prospective employer, before the making of the communication; and
(iii) in the case of consent under clause (i) or (ii) given orally, is provided written confirmation of that consent by the person making the communication, not later than 3 business days after the receipt of the consent by that person;
(B) the person who makes the communication does not, for the purpose of making the communication, make any inquiry that if made by a prospective employer of the consumer who is the subject of the communication would violate any applicable Federal or State equal employment opportunity law or regulation; and
(C) the person who makes the communication
(i) discloses in writing to the consumer who is the subject of the communication, not later than 5 business days after receiving any request from the consumer for such disclosure, the nature and substance of all information in the consumer's file at the time of the request, except that the sources of any information that is acquired solely for use in making the communication and is actually used for no other purpose, need not be disclosed other than under appropriate discovery procedures in any court of competent jurisdiction in which an action is brought; and
(ii) notifies the consumer who is the subject of the communication, in writing, of the consumer's right to request the information described in clause (i)."
[This definition is a long winded way of saying that what would normally be an investigative consumer report is not one if it is regarding a prospective employee who consents to being investigated before the investigation (i.e. information gathering) is begun. The person/company creating the consumer report must not make any inquiry regarding the consumer that would violate any Federal or State equal employment opportunity law or regulation. The person generating the consumer report must also produce it to the consumer upon request.]
I will pick up with 15 U.S.C. 1681a(p) in part 8.
"(o) Excluded communications. A communication is described in this subsection if it is a communication"
[A communication must meet all of the following criteria (i.e. 1 through 5) to be considered "excluded"]
"(1) that, but for subsection (d)(2)(D), would be an investigative consumer report;
(2) that is made to a prospective employer for the purpose of
(A) procuring an employee for the employer; or
(B) procuring an opportunity for a natural person to work for the employer;
(3) that is made by a person who regularly performs such procurement;
(4) that is not used by any person for any purpose other than a purpose described in subparagraph (A) or (B) of paragraph (2); and
(5) with respect to which
(A) the consumer who is the subject of the communication
(i) consents orally or in writing to the nature and scope of the communication, before the collection of any information for the purpose of making the communication;
(ii) consents orally or in writing to the making of the communication to a prospective employer, before the making of the communication; and
(iii) in the case of consent under clause (i) or (ii) given orally, is provided written confirmation of that consent by the person making the communication, not later than 3 business days after the receipt of the consent by that person;
(B) the person who makes the communication does not, for the purpose of making the communication, make any inquiry that if made by a prospective employer of the consumer who is the subject of the communication would violate any applicable Federal or State equal employment opportunity law or regulation; and
(C) the person who makes the communication
(i) discloses in writing to the consumer who is the subject of the communication, not later than 5 business days after receiving any request from the consumer for such disclosure, the nature and substance of all information in the consumer's file at the time of the request, except that the sources of any information that is acquired solely for use in making the communication and is actually used for no other purpose, need not be disclosed other than under appropriate discovery procedures in any court of competent jurisdiction in which an action is brought; and
(ii) notifies the consumer who is the subject of the communication, in writing, of the consumer's right to request the information described in clause (i)."
[This definition is a long winded way of saying that what would normally be an investigative consumer report is not one if it is regarding a prospective employee who consents to being investigated before the investigation (i.e. information gathering) is begun. The person/company creating the consumer report must not make any inquiry regarding the consumer that would violate any Federal or State equal employment opportunity law or regulation. The person generating the consumer report must also produce it to the consumer upon request.]
I will pick up with 15 U.S.C. 1681a(p) in part 8.
May 25, 2009
15 U.S.C. 1681a - part 6
Here's part 6 of my explanation of 15 U.S.C. 1681a (i.e. the definition section of the Fair Credit Reporting Act). This edition starts off with 1681a(l)'s definition of "firm offer of credit or insurance".
"(l) The term 'firm offer of credit or insurance' means any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following:
(1) The consumer being determined, based on information in the consumer's application for the credit or insurance, to meet specific criteria bearing on credit worthiness or insurability, as applicable, that are established
(A) before selection of the consumer for the offer; and
(B) for the purpose of determining whether to extend credit or insurance pursuant to the offer."
(2) Verification
(A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer's application for the credit or insurance, or other information bearing on the credit worthiness or insurability of the consumer; or
(B) of the information in the consumer's application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness or insurability."
[A company has to have a permissible purpose to access your credit report. One such permissible purpose is if the company is making the consumer a firm offer of credit or insurance. Companies often come up with a specific criteria for consumers to which they are willing to offer credit. They then provide this criteria to the credit bureaus, who return the names and addresses of all consumers who meet the company's criteria.]
"(3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was
(A) established before selection of the consumer for the offer of credit or insurance; and
(B) disclosed to the consumer in the offer of credit or insurance."
[Obviously, if the consumer does not provide the required collateral, the credit grantor should be allowed to get out of its firm offer of credit. However, the required collateral must be established before the firm offer of credit is made, so that the company can not just use the collateral as an excuse to obtain a consumer's credit report but then not follow through with the offer.]
"(m) The term "credit or insurance transaction that is not initiated by the consumer" does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of
(1) reviewing the account or insurance policy; or
(2) collecting the account."
[This definition makes clear that a creditor can access its debtor's credit report for account review and collection purposes and that such access is not considered a credit or insurance transaction not initiated by the consumer.]
"(n) The Term 'State' means any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States."
[Some provisions of the FCRA can only be enforced by the "State". This definition expands the meaning of "State" beyond the fifty states of the United States to include Puerto Rico, the District of Columbia and any other United States territory or possession.]
The definition of "excluded communications" comes next but is pretty long, so I will cover it in part seven.
"(l) The term 'firm offer of credit or insurance' means any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following:
(1) The consumer being determined, based on information in the consumer's application for the credit or insurance, to meet specific criteria bearing on credit worthiness or insurability, as applicable, that are established
(A) before selection of the consumer for the offer; and
(B) for the purpose of determining whether to extend credit or insurance pursuant to the offer."
(2) Verification
(A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer's application for the credit or insurance, or other information bearing on the credit worthiness or insurability of the consumer; or
(B) of the information in the consumer's application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness or insurability."
[A company has to have a permissible purpose to access your credit report. One such permissible purpose is if the company is making the consumer a firm offer of credit or insurance. Companies often come up with a specific criteria for consumers to which they are willing to offer credit. They then provide this criteria to the credit bureaus, who return the names and addresses of all consumers who meet the company's criteria.]
"(3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was
(A) established before selection of the consumer for the offer of credit or insurance; and
(B) disclosed to the consumer in the offer of credit or insurance."
[Obviously, if the consumer does not provide the required collateral, the credit grantor should be allowed to get out of its firm offer of credit. However, the required collateral must be established before the firm offer of credit is made, so that the company can not just use the collateral as an excuse to obtain a consumer's credit report but then not follow through with the offer.]
"(m) The term "credit or insurance transaction that is not initiated by the consumer" does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of
(1) reviewing the account or insurance policy; or
(2) collecting the account."
[This definition makes clear that a creditor can access its debtor's credit report for account review and collection purposes and that such access is not considered a credit or insurance transaction not initiated by the consumer.]
"(n) The Term 'State' means any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States."
[Some provisions of the FCRA can only be enforced by the "State". This definition expands the meaning of "State" beyond the fifty states of the United States to include Puerto Rico, the District of Columbia and any other United States territory or possession.]
The definition of "excluded communications" comes next but is pretty long, so I will cover it in part seven.
15 U.S.C. 1681a - part 5
Continuing with our discussion of 15 U.S.C. 1681a (i.e. the definition section of the Fair Credit Reporting Act), the next definition is an important one in that it defines what constitutes an "adverse action" -
"(k) Adverse Action
(1) Actions included. The term 'adverse action'
(A) has the same meaning as in section 701(d)(6) of the Equal Credit Opportunity Act; and"
[701(d)(6) of th ECOA reads as follows: "For purposes of this subsection, the term 'adverse action' means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit."
In other words, examples of an adverse action include where a consumer's credit application is denied, where the consumer's existing credit account is messed with by the creditor in an adverse way (i.e. lowering of the credit limit, closing of the account completely or raising of the interest rate), or where a consumer requests one amount of credit but is granted a lesser amount.]
"(B) means
(i) a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance;"
[Adverse actions also include denials of insurance applications or unfavorable changes in the amount of existing insurance coverage or an increase in the cost of existing insurance (i.e. your premium goes up because of the contents of your consumer report)].
"(ii) a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee;"
[Adverse actions also include denials of employment applications, or demotions, pay reductions or other adverse changes to an employment relationship that are based upon a consumer report.]
"(iii) a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 604(a)(3)(D) [Section 1681b]; and"
[1681(a)(3)(D) relates to licenses or other benefits granted by governmental entities where the governmental entity is required by law to consider an applicant's financial responsibility or status. I will cover this in greater detail when we get to section 1681 but I think this section relates to financial benefits like disability or welfare benefits.]
"(iv) an action taken or determination that is
(I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under section 604(a)(3)(F)(ii)[section 1681b]; and
(II) adverse to the interests of the consumer."
[This is the catch all for adverse actions that do not fall under one of the usual examples of adverse actions. Basically, if a consumer applies for something and does not get it because of the contents of his or her consumer report, it is an adverse action. As indicated by this section, this also includes where existing creditors do periodic reviews of its customers' credit reports and find something that makes the creditor want to reduce its risk by lowering credit limits, closing accounts or increasing interest rates.]
"(2) Applicable findings, decisions, commentary, and orders. For purposes of any determination of whether an action is an adverse action under paragraph (1)(A), all appropriate final findings, decisions, commentary, and orders issued under section 701(d)(6) of the Equal Credit Opportunity Act by the Board of Governors of the Federal Reserve System or any court shall apply."
[This section just takes advantage of prior decisions defining adverse actions made by Courts and the Board of Governors of the Federal Reserve System. As a result, the FCRA's definition of "adverse action" did not have to start from scratch.]
The next installment will cover the definition of "firm offer of credit or insurance", another important definition in the FCRA.
"(k) Adverse Action
(1) Actions included. The term 'adverse action'
(A) has the same meaning as in section 701(d)(6) of the Equal Credit Opportunity Act; and"
[701(d)(6) of th ECOA reads as follows: "For purposes of this subsection, the term 'adverse action' means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit."
In other words, examples of an adverse action include where a consumer's credit application is denied, where the consumer's existing credit account is messed with by the creditor in an adverse way (i.e. lowering of the credit limit, closing of the account completely or raising of the interest rate), or where a consumer requests one amount of credit but is granted a lesser amount.]
"(B) means
(i) a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance;"
[Adverse actions also include denials of insurance applications or unfavorable changes in the amount of existing insurance coverage or an increase in the cost of existing insurance (i.e. your premium goes up because of the contents of your consumer report)].
"(ii) a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee;"
[Adverse actions also include denials of employment applications, or demotions, pay reductions or other adverse changes to an employment relationship that are based upon a consumer report.]
"(iii) a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 604(a)(3)(D) [Section 1681b]; and"
[1681(a)(3)(D) relates to licenses or other benefits granted by governmental entities where the governmental entity is required by law to consider an applicant's financial responsibility or status. I will cover this in greater detail when we get to section 1681 but I think this section relates to financial benefits like disability or welfare benefits.]
"(iv) an action taken or determination that is
(I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under section 604(a)(3)(F)(ii)[section 1681b]; and
(II) adverse to the interests of the consumer."
[This is the catch all for adverse actions that do not fall under one of the usual examples of adverse actions. Basically, if a consumer applies for something and does not get it because of the contents of his or her consumer report, it is an adverse action. As indicated by this section, this also includes where existing creditors do periodic reviews of its customers' credit reports and find something that makes the creditor want to reduce its risk by lowering credit limits, closing accounts or increasing interest rates.]
"(2) Applicable findings, decisions, commentary, and orders. For purposes of any determination of whether an action is an adverse action under paragraph (1)(A), all appropriate final findings, decisions, commentary, and orders issued under section 701(d)(6) of the Equal Credit Opportunity Act by the Board of Governors of the Federal Reserve System or any court shall apply."
[This section just takes advantage of prior decisions defining adverse actions made by Courts and the Board of Governors of the Federal Reserve System. As a result, the FCRA's definition of "adverse action" did not have to start from scratch.]
The next installment will cover the definition of "firm offer of credit or insurance", another important definition in the FCRA.
May 24, 2009
15 U.S.C. 1681a - part 4
Part four of the summary of 15 U.S.C. 1681a (the definition section of the Fair Credit Reporting Act):
"(h) The term 'employment purposes' when used in connection with a consumer report means a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee."
[In other words, a consumer report that is used by a potential employer when deciding whether to hire a consumer, or a consumer report used by a current employer when deciding whether to promote, reassign or keep an employee, is used for "employment purposes".]
"(i) The term 'medical information' - -
(1) means information or data, whether oral or recorded, in any form or medium, created by or derived from a health care provider or the consumer, that relates to - -
(A) the past, present, or future physical, mental, or behavorial health or condition of an individual;
(B) the provision of health care to an individual; or
(C) the payment for the provision of health care to an individual."
[If the information falls under any of these categories, it is considered "medical information" and can not be included on a consumer report.]
"(2) does not include the age or gender of a consumer, demographic information about the consumer, including a consumer's residence address or e-mail address, or any other information about a consumer that does not related to the physical, mental, or behavioral health or condition of a consumer, including the existence or value of any insurance policy."
[These items are not considered "medical information" and are thus allowed to be on a consumer report or an investigative consumer report.]
"(j) Definitions Relating to Child Support Obligations
(1) The 'overdue support' has the meaning given to such term in section 666(e) of title 42 [Social Security Act, 42 U.S.C. Section 666(e)].
(2) The term 'State or local child support enforcement agency' means a State or local agency which administers a State or local program for establishing and enforcing child support obligations."
[These definitions relate to 15 U.S.C. 1681s-1 which requires consumer reportin agencies to publish information regarding a consumer's failure to pay overdue child support if the information is less than 7 years old and reported to the consumer reporting agency by a State or local child support enforcement agency.]
Part 5 of 15 U.S.C. 1681a will pick up with subsection (k).
"(h) The term 'employment purposes' when used in connection with a consumer report means a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee."
[In other words, a consumer report that is used by a potential employer when deciding whether to hire a consumer, or a consumer report used by a current employer when deciding whether to promote, reassign or keep an employee, is used for "employment purposes".]
"(i) The term 'medical information' - -
(1) means information or data, whether oral or recorded, in any form or medium, created by or derived from a health care provider or the consumer, that relates to - -
(A) the past, present, or future physical, mental, or behavorial health or condition of an individual;
(B) the provision of health care to an individual; or
(C) the payment for the provision of health care to an individual."
[If the information falls under any of these categories, it is considered "medical information" and can not be included on a consumer report.]
"(2) does not include the age or gender of a consumer, demographic information about the consumer, including a consumer's residence address or e-mail address, or any other information about a consumer that does not related to the physical, mental, or behavioral health or condition of a consumer, including the existence or value of any insurance policy."
[These items are not considered "medical information" and are thus allowed to be on a consumer report or an investigative consumer report.]
"(j) Definitions Relating to Child Support Obligations
(1) The 'overdue support' has the meaning given to such term in section 666(e) of title 42 [Social Security Act, 42 U.S.C. Section 666(e)].
(2) The term 'State or local child support enforcement agency' means a State or local agency which administers a State or local program for establishing and enforcing child support obligations."
[These definitions relate to 15 U.S.C. 1681s-1 which requires consumer reportin agencies to publish information regarding a consumer's failure to pay overdue child support if the information is less than 7 years old and reported to the consumer reporting agency by a State or local child support enforcement agency.]
Part 5 of 15 U.S.C. 1681a will pick up with subsection (k).
May 23, 2009
15 U.S.C. 1681a - part 3
More explanation regarding the definitions found in 15 U.S.C. 1681a of the Fair Credit Reporting Act:
"(e) The term "investigative consumer report" means a consumer report or portion thereof in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer's credit record obtained directly from a creditor of the consumer or from a consumer reporting agency which such information was obtained directly from a credito of the consumer or from the consumer."
[That's a mouthful. Investigative consumer reports are really just reports about consumers that do not directly touch on a consumer's credit worthiness. One example is a report on a consumer's criminal record. Another example is a report regarding the neighborhood a consumer lives in, including the incomes of the consumer's neighbors.
While at least some of the big three credit bureaus sell investigative consumer reports (Experian jumps to mind), I have never heard of a consumer reporting agency actually directly talking to any neighbor or friend of a consumer. They certainly do not talk to anyone when investigating a consumer's dispute of an error appearing on his credit report! In reality, "investigative consumer reports" are just compilations of information about consumers that do not include credit history type information, such as criminal records, driving records, litigation records, insurance claim summaries, etc.]
"(f) The term "consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports."
[This is an important definition. As you can see, it clearly applies to the big three credit bureaus, Experian, Equifax and Trans Union. But it is broader than just the credit bureaus. It applies to any company that compiles information about a consumer for the purpose of the compiled information to third parties. For instance, Telecheck, which keeps up with whether consumers have a likelihood to write bad checks, is a consumer reporting agency since it tracks consumers' check writing history and sells this information to merchants. So just because a company does not call itself a consumer reporting agency does not mean that the FCRA does not apply to them as such.]
"(g) The term "file", when used in connection with information on any consumer, means all of the information on that consumer recorded and retained by a consumer reporting agency regardless of how the information is stored."
[This definition, while appearing obvious at first, is important because of 15 U.S.C. 1681g, which requires a consumer reporting agency to provide a consumer, upon request, with a copy of his or her file. The big three (i.e. Experian, Equifax and Trans Union) prefer to only provide you what they contend is your credit file. But in reality, they are only providing you with part of your "file" as that term is defined by 15 U.S.C. 1681a(g). More on that when we get to 1681g. The credit bureaus also have other information about you, such as "snapshots" of your credit report as it looked at different times in the past or your credit score. Even though these snapshots are not part of what the credit bureaus say is your file, they do fall under 1681a(g)'s definition of "file" and thus should be produced on request. Also, the consumer reporting agencies maintain "audit trails" which are about you but are routinely not produced as part of your "file". Audit trails are the actual information entered by a creditor to access your credit file (i.e. name, SSN, address, date of birth) and also includes the credit score provided by the credit bureau to the creditor and the denial codes that the credit bureau suggests the creditor use if it wants to deny the credit application. These codes translate into textual reasons for denial such as "delinquent credit obligations" or "debt to income ratio too high", etc. that you see on the adverse action letters sent by creditor to denied applicants.
Note also the qualification that it does not matter how the information is stored. If its about you, its still part of your file, even if its in computer format or has not been printed yet. Thus, I think even your credit score is part of your "file" that should be produced upon request.]
I will continue on with 1681a in the next installment.
"(e) The term "investigative consumer report" means a consumer report or portion thereof in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer's credit record obtained directly from a creditor of the consumer or from a consumer reporting agency which such information was obtained directly from a credito of the consumer or from the consumer."
[That's a mouthful. Investigative consumer reports are really just reports about consumers that do not directly touch on a consumer's credit worthiness. One example is a report on a consumer's criminal record. Another example is a report regarding the neighborhood a consumer lives in, including the incomes of the consumer's neighbors.
While at least some of the big three credit bureaus sell investigative consumer reports (Experian jumps to mind), I have never heard of a consumer reporting agency actually directly talking to any neighbor or friend of a consumer. They certainly do not talk to anyone when investigating a consumer's dispute of an error appearing on his credit report! In reality, "investigative consumer reports" are just compilations of information about consumers that do not include credit history type information, such as criminal records, driving records, litigation records, insurance claim summaries, etc.]
"(f) The term "consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports."
[This is an important definition. As you can see, it clearly applies to the big three credit bureaus, Experian, Equifax and Trans Union. But it is broader than just the credit bureaus. It applies to any company that compiles information about a consumer for the purpose of the compiled information to third parties. For instance, Telecheck, which keeps up with whether consumers have a likelihood to write bad checks, is a consumer reporting agency since it tracks consumers' check writing history and sells this information to merchants. So just because a company does not call itself a consumer reporting agency does not mean that the FCRA does not apply to them as such.]
"(g) The term "file", when used in connection with information on any consumer, means all of the information on that consumer recorded and retained by a consumer reporting agency regardless of how the information is stored."
[This definition, while appearing obvious at first, is important because of 15 U.S.C. 1681g, which requires a consumer reporting agency to provide a consumer, upon request, with a copy of his or her file. The big three (i.e. Experian, Equifax and Trans Union) prefer to only provide you what they contend is your credit file. But in reality, they are only providing you with part of your "file" as that term is defined by 15 U.S.C. 1681a(g). More on that when we get to 1681g. The credit bureaus also have other information about you, such as "snapshots" of your credit report as it looked at different times in the past or your credit score. Even though these snapshots are not part of what the credit bureaus say is your file, they do fall under 1681a(g)'s definition of "file" and thus should be produced on request. Also, the consumer reporting agencies maintain "audit trails" which are about you but are routinely not produced as part of your "file". Audit trails are the actual information entered by a creditor to access your credit file (i.e. name, SSN, address, date of birth) and also includes the credit score provided by the credit bureau to the creditor and the denial codes that the credit bureau suggests the creditor use if it wants to deny the credit application. These codes translate into textual reasons for denial such as "delinquent credit obligations" or "debt to income ratio too high", etc. that you see on the adverse action letters sent by creditor to denied applicants.
Note also the qualification that it does not matter how the information is stored. If its about you, its still part of your file, even if its in computer format or has not been printed yet. Thus, I think even your credit score is part of your "file" that should be produced upon request.]
I will continue on with 1681a in the next installment.
15 U.S.C 1681a - part two
"(d) Consumer Report
(1) In general. The term 'consumer report' means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer eligibility for
(A) credit or insurance to be used primarily for personal, family, or household purposes;
(B) employment purposes; or
(C) any other purpose authorized under section 604 [(1681b]."
[This means that only credit reports transmitted by a consumer reporting agency to a third party is considered a "consumer report". The credit report provided directly to the consumer by the consumer reporting agency to review is not a "consumer report" but is instead a "consumer disclosure" and thus does not fall under the definition of "consumer report". Also, a credit report is only a "consumer report" if it is either used for personal, family or household purposes, or employment purposes or one of the permissible purposes found in 1681b, which we will cover later. This means that credit reports generated for a business purpose (i.e. a business loan) are not "consumer reports" and thus do not fall under the protections of the FCRA.]
"(2) Exclusions. Except as provided in paragraph (3), the term 'consumer report' does not include
(A) subject to section 624, any
(i) report containing information solely as to transactions or experiences between the consumer and the person making the report;"
[This means that reports that only contain information regarding the dealings between the consumer and the person making the report are not consumer reports. This makes sense because its not an assembly of the overall credit history but only the experiences of that particular consumer with the particular company creating the report.]
"(ii) communication of that information among persons related by common ownership or affiliated by corporate control; or
(iii) communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspiciously disclosed to the consumer that the information may be communicated among such persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that such information not be communicated among such persons;"
[Subsections (ii) and (iii) allow the internal sharing of information between sister corporations or parent/child corporations without triggering the requirements of the FCRA.]
"(B) any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device;"
[In other words, the conveying of a decision to grant or deny a credit application is not a "consumer report" but is obviously often based upon a "consumer report".]
"(C) any report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys his or her decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made, and such person makes the disclosures to the consumer required under section 615 [1681m]; or"
[I am not sure exactly what this section is talking about. It might be the situation where a consumer is attempting to make a purchase (i.e. a car) and the seller shops the note on the purchase to different potential lenders. The communications from these lenders to the seller regarding whether they will grant credit are not "consumer reports".]
"(D) a communication described in subsection (o) or (x)."
[We'll get to these when we cover subsections (o) and (x).]
"(3) Restriction on sharing of medical information. Except for information or any communication of information disclosed as provided in section 604(g)(3), the exclusions in paragraph (2) shall not apply with respect to information disclosed to any person related by common ownership or affiliated by corporate control, if the information is --
(A) medical information;
(B) an individualized list or description based on the payment transactions of the consumer for medical products or services; or
(C) an aggregate list of identified consumers based on payment transactions for medical products or services."
[Basically, the "consumer report" can not include medical information, even just a name of a medical provider, if that name reveals any type of private medical information about the consumer (i.e. a bill from a "Cancer Hospital").]
This concludes the definition of "consumer report" which is long but obviously important. The next post will continue the definitions section of 15 U.S.C 1681a.
(1) In general. The term 'consumer report' means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer eligibility for
(A) credit or insurance to be used primarily for personal, family, or household purposes;
(B) employment purposes; or
(C) any other purpose authorized under section 604 [(1681b]."
[This means that only credit reports transmitted by a consumer reporting agency to a third party is considered a "consumer report". The credit report provided directly to the consumer by the consumer reporting agency to review is not a "consumer report" but is instead a "consumer disclosure" and thus does not fall under the definition of "consumer report". Also, a credit report is only a "consumer report" if it is either used for personal, family or household purposes, or employment purposes or one of the permissible purposes found in 1681b, which we will cover later. This means that credit reports generated for a business purpose (i.e. a business loan) are not "consumer reports" and thus do not fall under the protections of the FCRA.]
"(2) Exclusions. Except as provided in paragraph (3), the term 'consumer report' does not include
(A) subject to section 624, any
(i) report containing information solely as to transactions or experiences between the consumer and the person making the report;"
[This means that reports that only contain information regarding the dealings between the consumer and the person making the report are not consumer reports. This makes sense because its not an assembly of the overall credit history but only the experiences of that particular consumer with the particular company creating the report.]
"(ii) communication of that information among persons related by common ownership or affiliated by corporate control; or
(iii) communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspiciously disclosed to the consumer that the information may be communicated among such persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that such information not be communicated among such persons;"
[Subsections (ii) and (iii) allow the internal sharing of information between sister corporations or parent/child corporations without triggering the requirements of the FCRA.]
"(B) any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device;"
[In other words, the conveying of a decision to grant or deny a credit application is not a "consumer report" but is obviously often based upon a "consumer report".]
"(C) any report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys his or her decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made, and such person makes the disclosures to the consumer required under section 615 [1681m]; or"
[I am not sure exactly what this section is talking about. It might be the situation where a consumer is attempting to make a purchase (i.e. a car) and the seller shops the note on the purchase to different potential lenders. The communications from these lenders to the seller regarding whether they will grant credit are not "consumer reports".]
"(D) a communication described in subsection (o) or (x)."
[We'll get to these when we cover subsections (o) and (x).]
"(3) Restriction on sharing of medical information. Except for information or any communication of information disclosed as provided in section 604(g)(3), the exclusions in paragraph (2) shall not apply with respect to information disclosed to any person related by common ownership or affiliated by corporate control, if the information is --
(A) medical information;
(B) an individualized list or description based on the payment transactions of the consumer for medical products or services; or
(C) an aggregate list of identified consumers based on payment transactions for medical products or services."
[Basically, the "consumer report" can not include medical information, even just a name of a medical provider, if that name reveals any type of private medical information about the consumer (i.e. a bill from a "Cancer Hospital").]
This concludes the definition of "consumer report" which is long but obviously important. The next post will continue the definitions section of 15 U.S.C 1681a.
May 19, 2009
15 U.S.C. 1681a
The first "lettered" section of the Fair Credit Reporting Act is 15 U.S.C. 1681a. This is the "definition" section of the FCRA. This section of the FCRA is quite lengthy, so I am going to split up the explanation of 1681a into several posts.
15 U.S.C. 1681a is entitled "Definitions; rules of construction" and begins:
"(a) Definitions and rules of construction set forth in this section are applicable for the purposes of this title."
This means the definitions and rules of construction in the rest of the 1681a apply to the entire FCRA.
The first actual definition is found in subsection (b).
"(b) The term 'person' means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity."
Bet you didn't know that the word "person" had to be defined. The reason behind the definition of person is to differentiate it from "consumer". The word "person" is broader than "consumer".
"(c) The term 'consumer' means an individual."
Told you "consumer" was less broad than "person". This means that a "consumer report" is only about an actual living individual, not a corporation, assoication, trust, estate, etc. Thus, a credit report about something other than a consumer is not a "consumer report" and is therefore not subject to the FCRA.
Speaking of consumer reports ... we'll discuss their definition in the next post.
15 U.S.C. 1681a is entitled "Definitions; rules of construction" and begins:
"(a) Definitions and rules of construction set forth in this section are applicable for the purposes of this title."
This means the definitions and rules of construction in the rest of the 1681a apply to the entire FCRA.
The first actual definition is found in subsection (b).
"(b) The term 'person' means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity."
Bet you didn't know that the word "person" had to be defined. The reason behind the definition of person is to differentiate it from "consumer". The word "person" is broader than "consumer".
"(c) The term 'consumer' means an individual."
Told you "consumer" was less broad than "person". This means that a "consumer report" is only about an actual living individual, not a corporation, assoication, trust, estate, etc. Thus, a credit report about something other than a consumer is not a "consumer report" and is therefore not subject to the FCRA.
Speaking of consumer reports ... we'll discuss their definition in the next post.
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